In fact, failure is more than O.K. It’s required.

Columbus insisted the world was round and then promptly missed America on his first attempt. The Wright Brothers claimed flying was possible and nearly killed themselves trying to make it happen. Steve Jobs launched NEXT computers—a hardware failure that most don’t remember because they now think of him as the guru behind such ground-breaking devices as the iPod and iPhone. And, of course, Albert Einstein, whose very name we use as a short-hand for describing someone as a genius, was a lousy student. (As were many successful CEOs and entrepreneurs.)

That is an idea you need to accept, if you are going to do your best work. It is an idea that you definitely have to get across to your team—and indeed your entire company—in order to free it from the innovation-limiting shackles of perfection.

The phrase “Be patient. God isn’t finished with me yet” is a healthy mantra for most of us—and most of our innovation projects.

Soft Launches

One reason that’s true is that in order to make a product or service everything it can be it needs to be repeatedly soft-launched with both internal stakeholders and external customers. This means literally sending the idea—be it a product or a service—into a limited part of the marketplace with the full understanding that it will be modified (perhaps extensively) based on how customers and consumers react.

For successful launches to happen, a team must be O.K. with the premise that they are starting with what some may consider a half-baked idea, one that very well may fail as constituted. You need to make this O.K. You need to tell your team that the real failure is fear of launching an idea until it is perfect.

To buttress your case, make the following points:

1. We’re only right when the market tells us so. Right now, we presume to be right, and our thinking is based on as-good-as-we-can-get research, history, and gut feel. The market will help us see and hear what we can do to be more right (and also help us eliminate all the things our customers—and potential customers—don’t like or don’t want.)

2. We can make any changes quickly. We can simulate years of research data in the span of months once we are out in the marketplace. It is the fastest way to learn.

3. It has never been cheaper to test ideas; The Internet allows for instant feedback; empty strip malls allow for in-and-out shopping experiences with risk-free short-term leases; technology has made prototyping doable in days instead of weeks.

4. It is going to be fun. We’re doing this to learn and improve, not to beat up an idea. (So there is no reason for anyone to get defensive.)

5. We will be making our “mistake” on a small scale, i.e. you are not launching the Iridium Phone or Segway only to find no one understands it or only 1,000 people want it. If we find out our idea is completely off-base, we’re about to save the company millions of dollars and perhaps our jobs.

One more point: Be careful of the language that you use when describing your testing process. We often find that words like “prototype” and “beta” come with too much baggage to overcome. When they hear those terms, many people think it means that certain elements of the product (or service) that you are about to test are locked in place. That’s not the message you want to send. Just about everything should be up for grabs. For our people “soft launch” sends the message we expect lots of things about the idea to change. But consider creating your own language that stresses the results you are trying to achieve, e.g., iteration phase 3 or “project optimize”.

If your team still resists the idea of iterative soft launches, just remind them that if this approach was good enough for Columbus, Steve Jobs, and the Wright brothers, it is probably good enough for them.

From the press release for Booz & Company’s 2009 edition of the Global Innovation 1000:

In the face of a severe global recession, the world’s 1,000 largest publicly traded corporate research and development spenders increased R&D budgets in 2008, affirming the critical importance of innovation to their corporate strategies, according to Booz & Company’s Global Innovation 1000, the global management consulting firm’s fifth annual analysis of global innovation spending. R&D spending at these firms rose 5.7% in 2008, a slower rate of growth than the prior year’s 10% increase, but in line with the group’s 6.5% increase in worldwide sales. More than two-thirds of the companies included in this year’s Global Innovation 1000 maintained or increased R&D spending in 2008, even though a third of the companies reported a financial loss for the year.

Judging from the data in this year’s study, the results of the senior management survey, and conversations with executives, the recession’s effect on innovation activity has not been as severe as some observers of the business scene might have anticipated. Innovation has become central to every company’s efforts to compete, and the degree of competition has been in no sense reduced by the downturn; if anything, it has been heightened. Long product development cycles have forced companies to maintain their R&D spending even when revenues decline. And most companies are fully aware of the need to be in position to profit from the coming upturn.

Virtually all the companies we contacted noted that they have learned to streamline R&D processes, to make sure their product development filters more effectively reflect economic reality, to make smart bets on advantaged technologies, and to kill weak projects more quickly. All these changes should help them get more from their R&D investments over time. As we head into a better business environment, smart companies will see this recession as a learning experience. Every company should take the time to assess the strengths and weaknesses of its innovation systems and processes. The downturn no doubt revealed some major gaps in innovation capabilities. Fix them now. Doing so right away will pay dividends in terms of speed-to-market, quality of execution, and capacity – both in the coming upturn and well into the future.

The International Macroeconomic Data Set provides data from 1969 through 2020 for real (adjusted for inflation) gross domestic product (GDP), population, real exchange rates, and other variables for the 190 countries and 34 regions that are most important for U.S. agricultural trade.
The chart above shows the annual shares of real world GDP for four geographical regions (European Union 15, Asia/Oceania, Latin America and the combined share of Africa and the Middle East) compared to the U.S. share of world GDP between 1969 and 2009 (data here). What might be surprising is that the U.S. share of world GDP has been relatively constant for the last 40 years, and is actually slightly higher in 2009 (26.7%) that it was in 1975 (26.3%). It’s also interesting that the EU15’s share of world GDP has declined from about 36% of world output in 1969 to only 27% in 2009. Further, despite having a large share of the world’s oil reserves, the Middle East’s share of global output has increased from only 2.23% in 1969 to 3.16% in 2009 (graph shows Middle East combined with Africa).

Bottom Line: World GDP (real) doubled between 1969 and 1990, and has increased by another 60% since then, so that world output in 2009 is more than three times greater than in 1969. We might mistakenly assume that the significant economic growth over the last 40 years in China, India and Brazil has somehow come “at the expense of economic growth in the U.S.” (based on the “fixed pie fallacy”) but the data suggest otherwise. Because of advances in technology, innovation, and significant improvements in U.S. productivity, America’s share of total world output has remained remarkably constant at a little more than 25%, despite the significant increases in output around the world, especially in Asia.

Update: The chart above represents about 91% of the world economy and does not include Canada and the European countries not included in the EU-15.

Clouds, SaaS, Enterprise 2.0, Modules, Analytics, Enhancements, Fusion, Business ByDesign, Leo, Larry — Oh My! In CIO.com’s continuing analysis of the ERP market, we look at the future of ERP: What’s at stake, who are the contenders, and what is and isn’t likely to happen in 2010 and beyond.
By Thomas Wailgum

Introduction

What’s the future of ERP? What kind of a silly question is that, you may be asking yourself. First off, predicting the future—especially in the technology world—is a fool’s errand, best handled by Ouija Boards and IT analysts’ dartboards. And isn’t the future of ERP already here? Software-as-a-service, on-demand apps, enterprise 2.0 collaboration, open-source software, virtualization, cloud platforms. What more is there?

Right now, not much else. But the real future of enterprise software isn’t exclusively based on wow-factor applications and functionality. It’s about not only knowing which new applications and delivery models can immediately help the business; but also having the technological fleet of foot to take advantage of those new apps fast. That means not in 18 months or “next quarter,” but whenever line-of-business managers truly need that functionality. Think days.

In addition, CIOs and IT staffs must be certain that the underlying architecture and systems decisions they have made (or are making right now) are guided by a roadmap that allows for flexibility—an ability to adapt enterprise technology to disruptive business events as they occur.

When asked if the recession will ultimately prove to be a turning point in ERP’s history, Jim Hayes, the global managing director of Accenture‘s Oracle practice, who’s worked for decades with enterprise software, agrees. “I’m a believer that from disruption comes opportunity,” Hayes says. “The kind of disruptions that we’ve seen have been painful, certainly on one level, but maybe therapeutic, on another level, because it makes us rethink things.”

But change has never come easily or quickly to the ERP universe. MIT’s Erik Brynjolfsson and The Wharton School’s Adam Saunders note in their new book Wired for Innovation that it typically takes between five to seven years for major IT investments, like ERP systems, to deliver substantial returns. That’s due to the multi-year period it usually takes today’s organizations to make the enterprisewide changes needed to truly capitalize on the new IT applications and systems, contend Brynjolfsson and Saunders.

Change was already in the air. The global recession just accelerated it.

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After four decades, billions of dollars and many huge failures, Big ERP has become the software that no business can live without—and the software that still causes the most angst. See: Why ERP Is Still So Hard

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To Jon Reed, an independent analyst, SAP Mentor and blogger at JonERP.com, outdated pricing models (such as ERP maintenance agreements) and ERP systems’ turtle’s pace of innovation are going to be two critical areas for the vendor community in the near future. “I think the economy is a game changer,” he says. “Even when it returns, it will return in a way that will support different ERP business models than have been dominant in the past. Companies that can re-invent themselves—with more flexibility around service offerings—that’s going to be key.”Make no mistake: Enterprise software vendors have recently felt more economic hardship and had to tolerate more customer objections than ever before in their histories. And for many, more pain lies in wait. “The big ERP vendors are going to get a big punch in the gut, and to some degree they’ve already gotten it. They’ve already gotten some body blows,” Reed says. “How they respond is a really interesting question.”

At the venerable SAP, which has made billions from traditional Big ERP installations, the future of ERP commenced with the tacit realization that change was inevitable and good—for both the company and its customers. (As for shareholders, we’ll get to that later.) “Enterprise software is going through a transformation in a very significant way,” says Philip Say, vice president for SAP Business Suite. Themes that SAP has embraced in framing its own future of ERP include: clarity, innovation, enhancements without disruption, and timeless software.

“In one respect, and this is clearly a response to customer need and desires, [the future of ERP] is about the simplification of it,” Say contends. “These systems are highly mission-critical, and these can be difficult to implement and manage. [At SAP], there’s a world of activity to make consumption, investment and deployment easier and ultimately make usage of software by end user easier.”

Don’t buy Say’s or any other Big ERP vendor’s “Yes We Can” change rhetoric? In fact, SAP is challenging the “conventional thinking” around ERP, including the outdated acronym itself, according to Say. “It’s ironic: We’re so invested in the notion of ERP, yet we’re challenging the definition itself at SAP. I think it’s radically changing,” he says. “The classic perception is that these are finance, HR, back-office, classic stuff and that’s it. I challenge that definition, because when I see operations and how customers are using [enterprise software], they’re not doing it in that way any more.”

That’s been the dream at many companies and for CIOs since Y2K—a dream most often fed to them by eager ERP vendors. Just read this excerpt from a 2003 article in CIO:

Bill McDermott, president and CEO of SAP America, stares out the tinted glass wall overlooking the bustling convention floor and then dives into the same pitch he gives the pilgrimaging executives [at SAP’s Sapphire event]. “You have ERP,” says SAP America’s CEO. “The next step is to expand it to CRM and the supply chain.” The idea, he says, is to control all the data in a company by standardizing on one system for the front end and using one data source for the back. His pitch reaches its climax when McDermott sounds the message SAP has been trumpeting all week:
It’s time to move to a single instance.
In other words, McDermott is telling CIOs to forget the multiple systems their companies use today, rip them out, and replace them with one ERP system—with one data store—that serves the entire company, no matter how diversified or geographically spread out it is. That, he says, is how to get the most bang for your IT buck.

That dream has now faded for many companies. Even at SAP. “I think the concept is evolving,” Say contends. “There’s a pretty open acknowledgement that—is it practical to get to a single instance across all functions of a very large, global enterprise? No. That’s not a realistic goal any more. We’re living in a world where multiple systems have to be networked together, have to communicate openly with each other and need to have sophisticated enough infrastructures on top so that the business can manage it.”

The “more evolved” thinking, Say suggests, is this: Companies can achieve consistencies and efficiencies in their business processes without having to use one singular system that manages the entire landscape.

Accenture’s Hayes says that for many—but not all—companies, the pursuit of the single instance is a dream that hasn’t come true. “The homogenous dream was a great dream, and I think the industry has helped clients move toward the dream,” he says. “But like a lot of things you dreamed, it didn’t turn out all that you had hoped, and therefore you modify your dream.” (He notes, though, that it’s not impossible for companies to get to a global, single instance; Accenture has with its ERP system, he points out.) Hayes is emphatic, however, that companies not return to the days of “crazy spaghetti code, heterogeneous systems, unsynchronized data and all that came along with it.”

So what’s the future fix? A “happy middle,” Hayes offers, which takes advantage of new advances in middleware offerings, tools from the big vendors that allow easy integration between core databases and infrastructure, and SaaS apps where appropriate. He calls it harmonization.

Crispin Read, general manager of marketing for MicrosoftDynamics ERP, which targets midsize organizations, points to a trend he calls “hub and spoke” deployments: Companies use Oracle or SAP ERP suites as the central system of record, and off of that use smaller app packages, like Dynamics, in the subsidiaries, plants and various operating units of the larger company. “It’s not new,” Read says, “but we’re seeing a lot more companies doing this.” The rationale: A smaller, Tier II system is much cheaper and faster to deploy than force-feeding Big ERP software down on the smaller properties of the company that most likely don’t need the associated horsepower or headaches.

“With ERP, you can’t do a one-size-fits-all,” Read says. “The corporate office of a $10 billion organization just has different needs than the local operations in Australia. And if you try to deploy [SAP or Oracle] everywhere, you’re effectively going to be deploying an enterprise solution in a midmarket company, and the costs are going to explode.”

Could there be a resurgence in “best of breed” app strategies for vertical-specific business areas—whether that’s on-premise or in the cloud—without all the integration headaches of yore? AMR Research Chief Research Officer Bruce Richardson thinks so. “The Burger King approach—’have it your way’ with SaaS, on-premise, BPO,” Richardson says, “is going to force vendors like SAP, Oracle and Infor to get very aggressive in offering other deployment models.”

The Cloud Rolls In, Fast

Call it what you will: software-as-a-service, on-demand computing, Web-based software, cloud computing. Doesn’t matter, because business software experienced via an Internet connection and browser is already here. Resistance is futile, stupid and short-sighted. At this point, however, no one (save for the SaaS vendors, perhaps) is advocating for wholesale rip and replaces of on-premise ERP installs.

But as enthusiasm for traditional, on-premise, expensive and complicated software deployments wanes even further, Web-based software options hosted in either public or private clouds will become even more attractive for companies big and small looking for low costs and easily consumed apps, analysts say. (For the record, it appears that cloud computing is taking over the as the catch-all buzzword, but what’s cloud-based and what isn’t largely depends on which vendor you are speaking with—Salesforce.com is a self-described “Enterprise Cloud Computing Company”; NetSuite, a “Web-Based Business Software Suite” provider, and they have nearly identical businesses.)

“The supervendors have architected enormous complexity in order to be able to sell across so many different verticals, in so many industries,” says AMR’s Richardson. “I think there’s a need for simplicity, and the Salesforce.com and Workday people get that.” (Even Oracle and SAP have finally realized that, though those ships are slower and costlier to turn around—see: Business ByDesign saga and Oracle’s indecisiveness.)

Jim McGeever, the CFO of NetSuite, pays homage to Google for sticking to its uncomplicated homepage when the search world was morphing into portals in the late 1990s. Google’s success is, in part, a validation that easy to use, intuitive Web apps are critical to the future of ERP, McGeever contends. NetSuite’s “anytime, anywhere access” mantra is the manifestation of the 11-year-old vendor’s strategy that embraces UI simplification.

By the end of 2009, Gartner forecasts that global SaaS revenue will reach $7.5 billion, which is an 18 percent increase from 2008 revenue of $6.4 billion. For SaaS ERP apps, in particular, Gartner projected a small increase in worldwide revenues: from $1.17 billion to $1.24 billion in 2009. “Adoption of the on-demand deployment model has continued to grow as on-demand vendors have extended their services through alliances, partner offerings, and more recently, by offering and promoting user application development through platform as a service (PaaS) capabilities,” noted Sharon Mertz, research director at Gartner, in a report. “Although usage and adoption is still evolving, deployment of SaaS still varies between the enterprise application markets and within specific market segments because of buyer demand and applicability of the solution.” Looking out even farther, Gartner predicts that the SaaS market will show consistent growth through 2013 when global SaaS revenue will total more than $14 billion for the enterprise software markets.

SaaS vendors have had to fight the niche product label from the get-go; AMR’s Richardson says the perception is that “SaaS guys continue to nibble at the edges.” It’s likely that they will have to wage even more fierce battles in the future, according to data from market researcher Saugatuck Technology. Despite continued and sizable investments in SaaS development and adoption around the world, SaaS “will not become the primary IT standard and practice by year-end 2012,” notes the report, “An Endless Cycle of Innovation.” Instead, notes the report, SaaS will be viewed primarily as an important “agent of change” through this period. Two years from then, in 2014, is when Saugatuck predicts big change: “SaaS will become integral to infrastructure, business systems, operations and development within all aspects of user firms, with variations in status and roles based on region and business culture.”

The research houses are equally bullish on cloud computing’s future: David Cappuccio, Gartner’s chief of research for the infrastructure teams, ranked it as one of the top trends affecting companies’ technology use during the next five years. IDC’s cloud services revenue forecast jumps from $17.4 billion in 2009 to $44.2 billion in 2013.

All projections and speculation are subject to change without notice, of course, but once loyal on-premise companies get a taste of SaaS and cloud-based services, they typically come back for seconds, however small a bite it may seem to the Big ERP vendors, analysts say. NetSuite’s McGeever boasts that the vendor “gets more incremental revenue from selling to our installed base than we do from new business.” (See 5 Questions with NetSuite’s CFO.)

Converts are proclaiming their newfound faith more and more. Todd Pierce, CIO of Genentech, a $13 billion San Francisco-based biotech company, among other initiatives, purchased a Google Apps suite for 18,000 accounts and has moved ERP functionality to iPhone apps. In an interview with Abbie Lundberg (former CIO magazine editor-in-chief), Pierce offers a convincing overview of the huge savings, benefits and “revolutionary” usability factors that Genentech has experienced by moving enterprise software apps to Web-based and cloud computing software-delivery models.

“There are many things happening here that are good for users, good for the IT profession, good for business. It’s just good, good, good,” Pierce says. “You know, what’s slowing this adoption are all the priests of the past—all the preservationists. All the interests that are built up around the edifice that is enterprise software…. Cloud computing is a dream come true.”

Today, Newsweek and Intel released the findings from a survey on innovation and the economy. The good news: despite one of the deepest recessions in history, Americans have an undiminished faith in technology and innovation as the primary engines of economic growth. The bad news: most Americans say that the downturn has hurt the U.S.’s ability to innovate and they have significant doubts about our ability to maintain leadership.

While pursuing game-changing technology innovation is my charge at Intel, I am acutely interested in supporting this undiminished faith of the American people and am working tirelessly to relieve their doubts about our ability to compete on the global stage.

Too often I find that organizations of all types are told by their management or their customers to be more innovative. They quickly embrace the idea, but then struggle to understand its true meaning and are clueless about how to achieve it.

Having spent my entire career in R&D, I’ve learned that innovation is a type of human endeavor, a process. If we as a nation fail to understand that innovation is this long, often torturous process, we will find ourselves taking a back seat to those countries that learned how to innovate by studying us in great detail, but then took the bold steps to make innovation their hallmark instead of ours. If we are not vigilant, the students will have become the masters.

Being an optimist, something essential to being a successful innovator, I believe we can return to our cultural roots and make innovation a process to be once again embraced and nurtured. Doing so will require the kind of investment environments, R&D strategies, and management know-how to keep us at the forefront of innovation and reassert our competitiveness in the rapidly changing, global economy.

A 21st Century Model of Cooperation between Government, Industry, and Academia

The old 20th century research model is all but dead. The big “think tank” labs that did research for the sake of doing research, such as Bell Labs (invented information theory and the transistor) and the Xerox Palo Alto Research Center (invented the Ethernet, laser printing, and the window-mouse user interface) are now just shadows of their former selves.

After World War II, much of what energized our economy was driven by industrial research and development organizations continuing the innovation process by taking the fundamental ideas from academia or the big think tanks and turning them into truly useful products and services. Indeed, the Internet may have been invented at UCLA and Stanford, with funding by the Defense Research Projects Agency, and the World Wide Web at CERN and the University of Illinois with funding from NSF, but it took industrial R&D at companies such as Cisco and Google to make the net and the web the global reality they are today.

In the 21st century, we advocate the adoption of a more contemporary research model, bringing together the best of world-class university research and industrial R&D with critical government support in a phased approach that yields the best outcome for all three sectors and drives a healthy pipeline of innovative American products and services to the global market well into the new century.

Can Government Alone Drive Innovation?

According to the survey, nearly half of Americans also want the government to offer incentives to spur innovation and a third think a national innovation initiative would be very effective. Where is the next invention on the level of the integrated circuit or the Internet going to come from, and how can we be sure it creates high paying jobs here at home?

For the 21st century R&D model to work we also must commit to increased funding for R&D in both the public and private sectors. While the call we often hear is for unilateral increases in government R&D funding and tax policy, I guarantee you that alone will not keep us competitive. The decreasing amount of industrial investment in R&D must be of equal concern.

A two-year old study by the Chinese government of its own electronics industry revealed that very few companies in China spend more than one percent on R&D. Are you surprised that most of those companies are not profitable? The few that spend ten percent or more on R&D, more typical of U.S. electronics companies such as Intel, do make money. There is a powerful lesson to be learned from this study. Government funding and tax policy must be matched by industrial R&D investments. One without the other is a recipe for failure.

Science & Engineering Education in the U.S. is Critical

The doubts that Americans expressed in the survey about the ability to maintain leadership in innovation is shared by Chinese respondents. To no one’s surprise, the Chinese believe that the U.S. has a significant advantage today, but they expect to take the mantle of leadership over the next 30 years. In contrast, Americans say their doubts are largely based on a perceived gap with other nations in the quality of math and science education, with 82% thinking that the U.S. lags behind other countries. While it’s true that we do lag, the good news is that the trend for American student is positive. The 2007 Trends in International Mathematics and Science Study (TIMSS) ranked U.S. fourth and eighth grade student 12th and 10th world-wide in mathematics, up dramatically from previous surveys. We need to do whatever it takes for as long as it takes until we’re on par with the Chinese.

Immigration Policy Helps Power U.S. Innovation

Since innovation begins with an idea in response to a need, the next big product or service idea will hopefully come from the mind of a current American or an American-trained student. Given that I’m responsible for six of Intel’s international research labs, I can say first hand that the U.S. doesn’t have an exclusive deal on smart people. They are everywhere on the planet and most of them don’t live in the U.S. It doesn’t help to chase them out of the U.S. once they finish their academic training. We should give them a job offer and a hiring bonus the day they get their PhDs.

Tuning Up for the Global Battle

With 75% of Americans believing that technological innovation is more important than ever in driving U.S. economic success, the significance of developing our innovators of tomorrow is more pronounced than ever. The space race was basically a dual between two countries. Now we are engaged in a truly global competition over who will have the best ideas and who will turn those ideas into products, services, and high-paying jobs.

It’s amazing to think that with an enlightened combination of cutting edge academic research and industrial R&D, well-informed government policy and support, and continuous improvement of math and science outcomes, the next big thing is on the horizon — something that will change our lives and better our world. In that: not just reason to have faith, but a reason to act and act quickly.

Motivating the Newsweek-Intel Survey

Intel sponsored this survey with Newsweek to highlight key areas of interest around innovation. In the current economy, there is nothing more important than driving change that will create jobs and build confidence among the American people. Intel is also sponsoring a conference in Washington, DC to explore what American business, governmental and academic institutions, NGOs, and private citizens can do to invigorate our culture of innovation that will drive economic recovery and ensure long-term, sustainable growth.

What wasn’t said was that without AdMob, it would take a long time for Google to get thousands of apps to use its ad service as that would involve re-tweaking thousands of iPhone apps that were using AdMob’s network. Google didn’t have time for that, as CEO Eric Schmidt explained in an interview with Bloomberg:

“AdMob is clearly the best of its ilk for applications monetization…We think that’s as strategic as search monetization, which, of course, we’re very good at…One the key success points for the iPhone was this enormous development of apps, and particularly free apps, which are advertising supported…Now that we have our Android platform coming out, and really with some serious partners behind it, it will also be important to have that be true for Android as well as the others.”

With the acquisition of AdMob, Google now has access to usage data of many of the most popular mobile apps–especially the apps in the iTunes App Store. For iPhones. If Google is taking on Apple for mobile OS market share, they just scored a huge competitive advantage. Google will know more details than ever about how people are using iPhone apps, how they are engaging with advertising within those apps, and users’ loyalty to those apps. Dashboards like the above only provide a window into the beginning of the mining that Google is likely about to do on their mobile handset competition.

Get the complete lowdown on mobile app stores, including details on who is doing what, in this special report, which is included in the annual subscription of GigaOM Pro. Subscribe to GigaOM Pro for $79 a year, get this report.

Google has been worried sick about the rise of the app economy because it undermines its ad-based search paradigm. As Andy Abramson explained:

If your business is built on things like web based technology (search), cloud based technology (Apps) and advertising from traffic that goes to and through your search engine or when people are looking at their content in the apps, the concept of many app stores has to be very, very scary for a few reasons.

Well nothing like a bit of fear to loosen the purse strings. AdMob is Google’s second-largest advertising-related acquisition to date, behind DoubleClick, for which it paid $3.2 billion. The company also paid $1.6 billion for YouTube. Notably, Schmidt said he doesn’t view AdMob-sized deals as the norm for future deals.